Tuesday E-Mini Video Wrap Up

Enjoy a re-run of today’s E-Mini session exhibiting participation as measured by our Zero indicator. On the left side is the hourly panel and the Zero Lite runs on the right via the 5-min panel. Swing traders and scalpers are encouraged to watch the 5-min panel for early clues – in particular price/signal divergences and lack of participation as expressed by a flat signal. If you like what you see then may want to watch some earlier ones – you will find plenty of examples of what to look out for and how to avoid common traps when trading the E-Mini. Plus you may enjoy the tunes ;-)

It’s been a long day but I wanted to put one more wrap up video together for you guys as it has been a good scalping session. I think the signals were pretty valuable today.

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Tuesday Morning Briefing

Welcome to our morning briefing. Here we are reviewing short term setups ahead of the NYSE opening bell. If you are a scalper or swing trader then these setups may be of interest to you. As usual keep in mind that these are short term setups although they could be used as early entries for more longer term positions.

After a three week melt-up the bears are feeling pretty crappy right now – there’s very little desire to short this rally and in combination with yesterday’s doji we may be due for a small correction. Far from predicting one however I would look at the hourly panel for early clues. We have lost the 25-hour and that suggests at least some weakness as it has been leading the tape higher now for weeks. It is very much possible that we get a revisit of the 100-hour sometime today or tomorrow – this is where we either see a bounce or a drop toward a daily support level. For now I would stay out but I am watching with interest. If you are still long then simply advance your stop and hold – no reason to cut and run just yet.

On the setup side it’s pretty thin out there right now – the one chart I found I’ll have to keep for my subs. However if you’re in a GDP related pair then watch out around 10:00am EDT:

Please step into my lair:

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Finally enjoy a re-run of yesterday E-Mini session exhibiting participation as measured by our Zero indicator. On the left side is the hourly panel and the Zero Lite runs on the right via the 5-min panel. Swing traders and scalpers are encouraged to watch the 5-min panel for early clues – in particular price/signal divergences and lack of participation as expressed by a flat signal. If you like what you see then may want to watch some earlier ones – you will find plenty of examples of what to look out for and how to avoid common traps when trading the E-Mini. Plus you may enjoy the tunes ;-)

A few very valuable signals on the ZL yesterday – in particular the blue reversal signal at the top was golden. I am often skeptical when I see them in a strong trend but if you see the signal weaken then it’s time to follow any of your own short signals. Also note how the signal went completely flat toward the end which suggested buying exhaustion as supported by the doji on our daily chart. So I would pay close attention to the Zero Lite this morning at the open as it may provide clues as to whether paint a correction here or if we continue higher after a brief visit of the 100-hour SMA.


Evil Speculator 3.0

We interrupt your regularly scheduled programming to share with you some of the realizations I arrived at during my brief time off last week. First however let me again thank comrade Scott for carrying the torch for a few days – his contributions were to the point and spot on as usual. Now grab a cup of coffee or your favorite tea and sit back while I lay out our future path here at Evil Speculator, because once again there will be changes.

A little over four years ago, in late March of 2010, I actually took a few days off as well as I was getting frustrated with the blog and sensed a pressing need to introduce some changes in this site’s format, message, and general approach. On the surface there was nothing really wrong – as a matter of fact at that time Evil Speculator was receiving a ton of traffic and attention – even competing with that of the Slope. However it was also a time when we many of our readers and myself included were full of bearish prejudice – our game wasn’t even close to what we’re offering today. Like the Slope we were receiving hundreds of comments on each post and my AdSense numbers were hopping.

However, the Mole was not pleased. Because deep inside I knew that we all could do better – much better. It was time to step up our game. For the market had suddenly changed almost exactly a year prior and many of the folks coming here continued to pursue the same bearish illusions (a.k.a. Prechter’s P3) that had served them well up until March 2009. As I was scanning the comment section it seemed to me as if I had created some kind of social club for bears and there were few hints of the top notch trading blog I originally had envisioned. So I decided to pull the plug and step away for a few days. I was even considering to quit running the blog altogether but after some soul searching I decided to accept the challenge of building something bigger and better. In other words I set out to create Evil Speculator 2.0. A big part of that was to introduce a hybrid blog approach in which at least some of my efforts and time would be rewarded via subscription services. I however knew that keeping some of my work free for everyone was necessary in order to compensate for natural attrition and to keep the energy going. In my experience closed systems never survive for very long.

Secondly I vowed to henceforth dispense with any unnecessary noise and to completely limit the site’s mission to the sole pursuit of banking coin. Which meant to abide to a strict information diet and to start to approach the market as is and not as how we wanted it to be. In short we needed to grow up and shift from becoming talented amateurs to consistent trading professionals capable of surviving the increasing challenges thrust upon us in a new era of the financial markets. The Bernank had decided to give the banksters a free pass and we were effectively given two choices – adapt and prosper – or continue with business as usual and perish in the process. I think the choice was clear and four years later we are still here while many others have long vanished.

I also resumed posting discretionary trades again as part of ‘Evil Speculator Gold’ – a popular service that has continued up to this day and to which many of you have been subscribed for years now. Over time I also introduced several trading strategies, first starting out with Geronimo after which my collaboration with Scott led me to build more sophisticated systems like CrazyIvan and more recently Heisenberg. It was a major undertaking which took literally thousands of hours of hard work but in the process I wound up learning a lot about system development. But among some of the steeper hills to climb were developing low risk ideas, not falling prey to form fitting, definition and pursuit of an edge, capital commitment, risk control, and most importantly – self control.

I truly think we have come a long way since that day and it we surely had our ups and downs. When I look at Evil Speculator today I am very pleased with the progress but once again I think we could do much better. So let me highlight some of the areas where I believe I may have failed you or where I think we all could work together to achieve better results.

When I look at my Google Analytics numbers today it is clear that we are now commanding a fraction of the traffic we enjoyed back in 2010. Obviously some of the visitors didn’t enjoy the hybrid format and moved on to where they could find freebies all day. Now that is fine and I never expected to keep everyone around after changing the site’s format. I also have been actively discouraging idle chat and useless banter here on Evil Speculator, up the point where I was forced to ban a few of the more prolific offenders as I felt it was disrupting our productivity and progress. Suffice to say they I didn’t make friends this way but we’re not in this game to be popular – we’re here to survive and the game is tough enough without wasting your time sorting through useless chatter.

But there is more going on here than meets the eye. I often wonder why people come here and at some point choose to leave. I mean – if I am supposedly doing a good job and if this site offers value then they all ought to be coming back for more, right? So have I failed or are my setups not working? Well, I think my work (and my own bottom line) over the last few years speaks for itself but I don’t think the answer is that easy. Let’s take CrazyIvan for instance – it had a bumpy start last year but it has been producing nearly 50R since the beginning of this year. On the surface anyone in their right mind would want to trade a strategy that would produce over 50% (given 1% R sizes) in that short amount of time.

However, in reality CrazyIvan is a brutal grind and if you’re for instance dealing with a crappy broker who clips your profits via huge bid/ask spreads then a 50R+ strategy can quickly turn into a losing one. And that is only one of the trials and tribulations you will face when trading any automated system – sticking with it and taking each campaign like a robot is quite a challenge and it takes personal development to get to that point. So obviously there is a lot more to trading than just taking entries or market analysis. As Scott said the other day – that is the easy part. By the way this is not just limited to CrazyIvan – if you haven’t yet then I strongly encourage you to watch this video by Nick Rage which will will quickly reset some of the perceptions you may be clinging to.

So I think a big missing element here over the past few years has been that of personal development. People have been trying to copy and teach success several times in the past. Perhaps you have heard of Richard Dennis and Bill Eckhard who back in the 1980s created the turtle experiment. They took a defined set of system rules and hired a rag-tag team of people from all strokes of life to trade them. Many of them succeeded but some also failed – and over time most of them actually wound up shaking out. Why? Because they were unable to stick with the original turtle system rules, which by the way some are still trading today (see that Nick Rage video above).

So obviously there is a lot more to trading than meets the eye. For instance why am I personally turning into a nervous mess if I don’t hit the gym at least five times a week and on top of that teach my MA class to a bunch of kids in the park? Frankly speaking I don’t do it for them – I do it for myself as it is my personal mental reset. When I come back from rolling on the ground and getting roughed up (with bruises to show) I feel like a million bucks and am locked and loaded to actually do it in the market. Scott likes to dish it out as well but he also religiously pursues mental relaxation and meditation techniques – some of you actually find peace and balance in prayer and although I am not religious I know that it works for people with strong religious beliefs.

There is actually a long laundry list of topics that we as traders need to embrace to live up to the challenge we have picked for ourselves. Here are some examples: when to trade and when not to – what markets are easy and which ones are tough for which types of systems – how to deal with draw downs – how to avoid them – how to control yourself and your natural cognitive biases – how to be successful in life and to project those lessons to trading, etc. Heck, even how to get your fat ass into shape and to feel better for yourself – physical health is essential to sustain the onslaught of mental stress you will be facing, and I would like to see posts that provide tips on that end. Or how to combine your day job with your trading regime – e.g. what is necessary to for someone working 9-5 and driving in freeway traffic an hour back/forth to successfully trade systems like CrazyIvan or soon Heisenberg? I am certain that is a question many of you are facing right now, may this be related to our systems, someone else’s, or your very own.

Other topics I would like to see here revolve around picking a good broker, setting realistic personal financial goals, how b/a spreads will affect your systems profitability, how a large and increasing percentage of losses makes it more difficult for you to get back to where you started, etc. the list is long and we are only limited by our imagination. I even would like to see personal accounts of your experiences – how you have failed and perhaps how you managed to overcome various challenges. That one may actually become its own category here at Evil Speculator as we all can learn from each other and if nothing else it can aspire us to step up our own game.

Of course I cannot all do it by myself and quite frankly I will need a bit of help as my own days are already stretched to the max. So I reach out to some of you more senior folks – if you feel like contributing here then please shoot me an email to admin@ and let me know what types of topics you want to cover. We had guests posts here in the past and with a bit of coaching and a few general guidelines I think we can accommodate a variety of voices and kick this place to the next level.

Of course that doesn’t mean we should be exchanging cooking recipes or pictures of our pets – quite on the contrary – we need to remain focused but at the same time realize that trading is only 20% of technical analysis and 20% of money management – the other 60% is self development and that aspect has been largely missing here at Evil Speculator. For me this is my personal red pill moment – do I continue to keep doing what I have been doing over the past few years or do I implement the changes needed toward turning losing retail victims into lean mean trading machines? That after all has always been our core mission here and we will continue to push toward that ideal, although it is admittedly a daunting challenge. We won’t be able to get everyone on board but I certainly think we can do better than right now.

Of course our existing subscriber services will continue as usual, as a matter of fact we should leverage them to demonstrate how technical analysis and an established edge can turn us into consistent winners, despite all the hype. noise, and distractions you are facing on a daily basis. Perhaps I can even convince Scott to post here again on a regular basis – but frankly for that to happen he (and everyone else who volunteers) needs to see a real benefit for doing so. We cannot fall prey to distractions and we all need to work hard toward bettering ourselves. Changes are if you are reading this right now then what you are doing is not working for you – you may not know it or you may not be willing to admit it to yourself. Either way – we can fix it. But it is up to you to take the red pill and participate instead of passively expecting easy answers. Because that I guarantee you is the path to failure, no matter which system you try or which technical analysis you decide to follow (mine or someone else’s). You can’t expect for us to do all the heavy lifting – which means if you feel you have something to contribute then step up and do so.

Finally some of the more basic questions have been addressed here several times in the past and later today I will produce a ‘favorites’ page that links to some of our best posts of the past. It’s currently under the ‘evil’ page and I don’t think that’s an easy place so I’ll come up with something better – give me a few days.

That is all for now – please feel free to use the comment section to make your own suggestions or to propose new ideas. I’m looking forward to making this place even better :-)

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